Will the New Treasury Council Propel Bitcoin Adoption in Corporations and Congress?

The newly formed Treasury Council aims to advocate for federal Bitcoin adoption, consisting of corporate executives holding Bitcoin in their treasuries. This coalition, led by prominent figures in the cryptocurrency sector, is pushing for the BITCOIN Act, which proposes the federal government acquire up to one million Bitcoin over five years, significantly impacting the digital asset landscape.

Last updated: 16 September 2023 (BST)

Key Takeaways

• The Treasury Council features nine executives from major companies holding Bitcoin.
• They are endorsing the BITCOIN Act, which aims for significant federal Bitcoin acquisitions.
• The initiative is partially funded through the Federal Reserve's earnings.
• Decentralised Bitcoin storage facilities will be established across the US.
• Existing government-held Bitcoin will form the basis of a Strategic Bitcoin Reserve.

Formation of the Treasury Council

On 16 September 2023, a coalition of corporate Bitcoin holders announced the establishment of the Treasury Council. This group is positioned as advocates for federal Bitcoin adoption, comprising nine chief executives from firms like Strategy, CleanSpark, and Bitdeer Technologies. The council is led by Strategy's CEO, Phong Le, MARA Chairman Fred Thiel, and Riot CEO Jason Les.

The Treasury Council's goal is to influence the integration of Bitcoin into treasury strategies for global finance. The coalition describes itself as “an exclusive leadership body,” bringing together corporate executives and policymakers to enhance crypto's role in the financial landscape.

The BITCOIN Act and Legislative Advocacy

A critical part of their strategy involves endorsing the BITCOIN Act. This proposed legislation aims for the federal government to acquire up to one million Bitcoin over a period of five years. This could represent a significant investment, valued at approximately £116.5 billion based on current market prices.

As part of their advocacy, over a dozen crypto advocates met with lawmakers on Capitol Hill on the same day the council was announced. This meeting was backed by organisations like The Digital Chamber and Digital Power Network, highlighting a coordinated effort to push for legislative support.

The Support for the BITCOIN Act

The coalition's push is further reinforced as lawmakers present at the meeting included those who have cosponsored Senator Cynthia Lummis' reintroduced Bitcoin Act. This prominent support illustrates a growing recognition of Bitcoin's potential within governmental financial strategies.

Funding Mechanisms for the Initiative

The funding for this ambitious initiative is proposed to come from the Federal Reserve's net earnings, alongside Treasury certificate adjustments based on gold holdings. This approach aims to ensure that the acquisition of Bitcoin does not impose additional costs on taxpayers.

Moreover, the legislation outlines that all acquired Bitcoin must be stored for a minimum of 20 years. Furthermore, it stipulates that Treasury Secretaries can only sell a maximum of 10% of their holdings in any two-year period, providing a long-term commitment to maintaining federal Bitcoin reserves.

Establishment of Decentralised Storage Facilities

A key aspect of the BITCOIN Act includes the establishment of decentralised Bitcoin storage facilities across the United States. This initiative aims to secure the acquired Bitcoin and ensure its integrity as a long-term store of value.

Historical Context: The Executive Order

The discussion surrounding the Strategic Bitcoin Reserve is not entirely new. President Donald Trump signed an executive order on 6 March 2023, which established a framework for a Strategic Bitcoin Reserve and Digital Asset Stockpile. This order directed the federal government to retain forfeited crypto as a long-term asset.

Currently, the government holds approximately 200,000 BTC in custody, which will serve as a foundational asset for the proposed reserve. However, under the existing executive order, the government is not actively acquiring additional Bitcoin assets beyond what has been seized, a decision that has left some market participants disappointed.

Government's Approach to Bitcoin Acquisition

Treasury Secretary Scott Bessent has clarified that the administration aims to adopt budget-neutral strategies for expanding Bitcoin holdings. This deliberate approach seeks to maintain fiscal responsibility while exploring the potential benefits of Bitcoin as a digital asset.

Implications for the Cryptocurrency Market

The formation of the Treasury Council and the potential acquisition of Bitcoin by the federal government could have far-reaching implications for the cryptocurrency market. Increased institutional adoption may bolster Bitcoin's legitimacy, encouraging other corporations to consider similar treasury strategies.

Moreover, if the BITCOIN Act progresses through Congress, it could lead to a significant increase in demand for Bitcoin, potentially impacting its price and market dynamics. This scenario highlights the importance of regulatory developments in shaping the future of digital currencies.

The Future of Bitcoin in Corporate Treasuries

As the Treasury Council continues its advocacy efforts, it underscores the increasing confidence corporations are placing in Bitcoin as a viable asset for treasury management. The council's unique blend of corporate leadership and legislative engagement may pave the way for broader acceptance and integration of Bitcoin within financial strategies on a national scale.

Looking ahead, the successful passage of the BITCOIN Act could signal a new era in which Bitcoin is not only a speculative asset but also a cornerstone of federal financial strategy.

FAQs

What is the Treasury Council?

The Treasury Council is a coalition of corporate executives advocating for federal Bitcoin adoption. It comprises nine leaders from companies that hold Bitcoin in their treasuries, aiming to influence cryptocurrency legislation.

What is the BITCOIN Act?

The BITCOIN Act is proposed legislation that would require the federal government to acquire up to one million Bitcoin over five years, significantly impacting the cryptocurrency landscape and its adoption.

Who are the key members of the Treasury Council?

The Treasury Council includes executives like Phong Le (CEO of Strategy), Fred Thiel (Chairman of MARA), and Jason Les (CEO of Riot), among others, representing companies with substantial Bitcoin holdings.

How will the acquisition of Bitcoin be funded?

The acquisition of Bitcoin is proposed to be funded through the Federal Reserve's net earnings and adjustments to Treasury certificates based on gold holdings, ensuring budget neutrality for taxpayers.

What are the implications of the Strategic Bitcoin Reserve?

The Strategic Bitcoin Reserve aims to secure Bitcoin assets for the long term, potentially legitimising Bitcoin as a significant asset class within federal financial strategies and influencing corporate adoption.

What is the government's current stance on acquiring Bitcoin?

Currently, the government is not actively acquiring Bitcoin beyond seized assets, focusing on managing existing holdings in line with the Strategic Bitcoin Reserve established by the executive order signed by President Trump.

As the Treasury Council continues its push for Bitcoin adoption, the implications for both corporate strategy and federal policy could resonate across the financial landscape. How will these developments shape the future of digital currencies within the UK and beyond? #Bitcoin #TreasuryCouncil #CryptoLegislation